Friends Transport Carrier Vs ITO (ITAT Chandigarh)
In Friends Transport Carrier vs ITO, the Income Tax Appellate Tribunal (ITAT), Chandigarh, addressed an appeal concerning disallowance of transport expenses due to lack of evidence. The assessee, engaged in transport activities, reported total receipts of ₹81.89 lakh for Assessment Year 2020–21 and claimed expenditure of ₹80.31 lakh under Section 57 of the Income Tax Act. The Assessing Officer (AO) disallowed 75% of the claimed expenses, amounting to ₹60.11 lakh, citing failure to produce supporting evidence, and completed the assessment under Section 144 on a best judgment basis. The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, upheld the disallowance, leading to the assessee’s appeal before the Tribunal.
Upon review, the ITAT observed that while the assessee had earned transport receipts and incurred corresponding expenses, no proper substantiation was provided. Considering the nature of the business, the Tribunal invoked the presumptive taxation principles under Section 44AD and directed that the assessee’s income be reasonably estimated at 8% of total receipts, amounting to ₹6,55,143. The Assessing Officer was instructed to recompute the income accordingly. The appeal was thus partly allowed by the Tribunal on 7 October 2025.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
